Retailing
Retailing is the business activity of selling goods and services directly to consumers. There are many kinds of retailers.
Specialty Stores offer a limited number of different product lines, such as women’s clothing or sporting goods, but provide their customers with an extensive selection of brands and styles within each product line.
Department Stores feature a wide variety of different product lines and a selection of merchandise within each line.
Discount Stores sell a wide variety of merchandise at low prices.
Retail Chain Stores are multiple stores that carry much of the same merchandise and are managed with the same policies.
Warehouse Retailers offer a limited selection of many kinds of products. They deal in large quantities and tend to have lower prices.
Off-Price Retailers include factory outlet stores, close-out stores, and one-price retailers. These stores sell irregular or flawed merchandise, factory overruns—excess merchandise—and other goods at prices below regular retail prices.
Supermarkets offer a broad variety of groceries, as well as non-food items. Many supermarkets also offer a wide selection of ready-to-eat items, such as prepared salads, sandwiches, and entrees.
Convenience stores sell a variety of food and other items. Convenience stores are usually small and located on busy streets to make it easy for customers to make a quick purchase.
Non-store retailers contact customers by personally meeting with potential customers at their home, workplace, or some other convenient location (door-to-door sales); send by mail catalogues to homes and businesses so customers can order merchandise at their convenience (catalogue sales). Cybermalls on the Internet allow customers to browse for goods and services by visiting a site on the World Wide Web. Vending machine companies act as non-store retailers by selling items from machines that are located where people are likely to find them convenient, such as in gas stations or work places.
Inflation
Inflation is a steady rise in the average price level, or what is the same – a fall in the value of money.
The causes of inflation are rather complicated.
Demand-pull inflation can be summarized as “too much money is available to purchase too few goods and services”. In other words, if demand is growing faster than supply, prices will increase.
Cost-push inflation. When companies’ costs go up, they need to increase prices to maintain their profit margins. Increased costs can include things such as wages, taxes, or increased costs of imports.
Inflation may be classified according to the rate of increase in prices. The ‘rate of inflation’ is the percentage increase in the Retail Price Index (RPI) over the period of one year.
There are different degrees of inflation. It includes creeping inflation, galloping inflation and hyperinflation.
Creeping inflation is a slow rise in price level of no more than 10 percent a year. Creeping inflation may have beneficial effects on an economy and may stimulate economic activity.
Galloping inflation is characterized by much higher price increases, at annual rates from about 10 percent to several hundred per cent. Consumers buy goods and services to avoid even higher prices; real estate speculation increases; businesses concentrate on short-term investments; incentives to acquire savings, insurance policies, pensions, and long-term bonds are reduced because inflation erodes their future purchasing power; governments rapidly expand spending in anticipation of inflated revenues.
Hyperinflation is a very rapidly accelerating inflation. The rate of inflation may reach several thousand percent a year. Hyperinflation causes the entire economic system to break down.